New Executive Order Targets Reforms to Foreign Military Sales

By Nooree Lee, Frederic Levy & Martin Levy on April 11, 2025

On April 9^th, President Trump signed an Executive Order titled “Reforming Foreign Defense Sales To Improve Speed And Accountability” (“the FMS EO”). The FMS EO directs the Departments of Defense and State to reform the foreign defense sales system with the goal of “simultaneously strengthen[ing] the security capabilities of our allies and invigorat[ing] our own defense industrial base.”

The EO’s policy goals likely will receive bi-partisan support, as both the Biden administration and the first Trump administration oversaw record transfers of U.S. defense articles and services to foreign allies. Indeed, the FMS EO comes just a few months after the Department of State reported that the final year of the Biden administration saw the “highest ever annual total of sales and assistance provided to our allies and partners,” with a total value of $117.9 billion in sales under the Foreign Military Sales (FMS) program, a 45.7% increase from FY 2023. Moreover, many of the policy goals align generally with recommendations the House Foreign Affairs Committee’s TIGER Task Force issued last year.

On the other hand, the FMS EO would reduce Congressional review and export restrictions on the transfer of certain sensitive defense articles, expand the ability of foreign allies to procure defense items directly from U.S. contractors through direct commercial contracts, and place a new emphasis on cost and burden-sharing by allies. These measures are more likely to encounter resistance.

Policy Objectives of the EO

Section 2 of the FMS EO lays out the policy goals that will guide the Trump administration’s reform efforts. These goals focus on (1) improving accountability and transparency in foreign defenses sale systems; (2) reducing rules and regulations for foreign defense sales and transfer cases; and (3) increasing collaboration with and revitalizing the Defense Industrial Base.

The EO points specifically to “parallel decision-making” processes to expedite the defense sales process. The EO defines “parallel decision-making” as the granting of simultaneous certifications and approvals during the FMS process, as opposed to sequential decision-making where agencies wait for other agencies to make decisions before taking action. While the agencies in this parallel process are not named, it seems clear that the Trump administration wants to eliminate the back and forth between the Defense Security Cooperation Agency and the State Department’s Bureau of Political-Military Affairs whenever possible.

EO Directions to the Pentagon and the State Department

The FMS EO requires that the Secretaries of State and Defense shall “promptly” take three distinct actions related to foreign defense sales.

First, the Secretaries are required to “Implement National Security Presidential Memorandum 10 of April 19, 2018 (United States Conventional Arms Transfer Policy, “CAT Policy”), or any successor policy directive.” Recently the Trump administration had repealed the CAT Policy implemented by the Biden administration, and now the EO directs reimplementation of the CAT Policy from the first Trump administration, which placed a greater emphasis on economic security issues.
Second, the Secretaries of State or Defense are required to “[r]eevaluate restrictions imposed by the Missile Technology Control Regime (MTCR) on Category I items and consider supplying certain partners with specific Category I items, in consultation with the Secretary of Commerce.” The MTCR is an informal agreement among 35 countries that seeks to limit the risks of proliferation of weapons of mass destruction (WMD) delivery systems such as missiles and unmanned aerial vehicles by controlling exports of goods and technologies that could support such systems. Under the MCTR there is a “strong presumption to deny” transfers of MTCR Category I items, but the FMS EO indicates the Trump administration may be reconsidering such a presumption.
Finally, the Secretaries of Defense and State are directed to “submit a joint letter to the Congress proposing an update to statutory congressional certification (also known as congressional notification) thresholds of proposed sales under the FMS and Direct Commercial Sales (DCS) programs in the Arms Export Control Act” (AECA). The Secretary of State is also directed to “work with the Congress to review congressional notification processes to ensure the timely adjudication of notified FMS and DCS cases.” Under the FMS and DCS programs as currently constituted, the President must typically notify Congress of certain high-value sales with 30 days’ notice. This Congressional notification window is shortened to 15 calendar days in the case of sales to NATO Members, Japan, Australia, South Korea, Israel, or New Zealand. In practice, these formal notification timelines are typically preceded by informal engagement between the Department of State and Congressional staff. The FMS EO’s directive to the Secretaries of Defense and State indicates that the Trump administration may advocate to expedite the Congressional engagement and notification processes.

Identifying “Priority Partners” and Promoting “allied-burden sharing”

The FMS EO directs agencies to identify allies that will be prioritized for arms transfers. Within 60 days of the date of the FMS EO (June 8^th), the Secretary of State, in consultation with the Secretary of Defense is required to develop a list of priority partners for conventional arms transfers. Developed in tandem will be a list of priority “end-items”—i.e., the final products when assembled and ready for issue or deployment—for potential transfer to the priority partners.

While seeming to promote cooperation with allies on security issues, the FMS EO also reflects the Trump administration’s “America First” posture in two ways. First, the agencies are required to ensure that the transfer of priority end-items to priority partners “would not cause significant harm” to United States force readiness. Second, and more significantly, the FMS EO requires that any transfer of priority end-items to priority partners advance the goal of “strengthening allied burden-sharing, both by sharing the cost of end-item production and by increasing our allies’ capacity to meet capability targets independently, without sustained support from the United States.” This “cost-sharing” directive may indicate some reluctance on the part of the current administration to use grants or loans under the Foreign Military Financing program to support U.S. defense sales.

Finally, the FMS EO directs four additional actions:

Directing a Review and Update of the “FMS-Only” List — The FMS Only List is the list of defense articles that are exclusively available through the FMS process as opposed to the DCS process.
Directing Revisions to the U.S. Munitions List — The FMS EO appears to indicate that the United States Munitions List, located in the International Traffic in Arms Regulations at 22 C.F.R. part 121, will be revised to “focus protections solely on our most sensitive and sophisticated technologies.”
Directing Agencies to Prepare a Plan to Improve the Transparency of US Defense Sales.
Directing Agencies to Prepare a Plan for an electronic system to Track DCS and FMS Actions.

The Departments of Defense and State are tasked with developing plans to implement the EO within the next 60-120 days. The full impact of the EO will not be known until those plans are issued.